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Crypto Week: Whales Accumulate BTC, while Standard Chartered Bet on ETH

Bitcoin (BTC) has seen a 2.5% increase to $43,000 this week, while Ethereum (ETH) gained 3.7% to $2,388. The rise was even higher on Tuesday, at 4.6% and 5.7%, respectively, before prices rolled back later.

Investors are discussing positive developments in the crypto market. Firstly, there is satisfaction with the slowdown of capital outflow from the Grayscale spot Bitcoin ETF (GBTC). The series of 11 weeks of capital outflows was interrupted by an inflow of $183 million (4,200 BTC). While this is not enough to cover the outflow from GBTC entirely, it doesn't necessarily mean investors are pulling away from Bitcoin. On the contrary, whales holding 1,000 BTC have continued to accumulate the major cryptocurrency throughout January, increasing their stakes by $3 billion (76,000 BTC). The same trend is seen in futures ETFs, with ProShares Bitcoin Strategy ETF (BITO) experiencing $242.5 million in capital inflows in January. Moreover, the fund saw only one week out of four consecutive weeks of net outflows, and over the last 15 weeks, there were outflows only during three weeks.

This aligns with forecasts from institutional investors like Morgan Stanley about a "potential paradigm shift" in the global financial system after the approval of the first spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC). Several de-dollarization threats may significantly increase capital inflows to BTC and other crypto assets.

Standard Chartered has released a forecast for Ethereum, suggesting it may rise by 72.0% to $4,000 by the end of 2024 if spot Ethereum ETFs are approved by the SEC. The bank had previously forecasted BTC prices to surge to $120,000 by the end of the year. It envisions the SEC approving the first spot ETH ETF by May 26, 2024.

Meanwhile, the Harvest Fund has filed a spot Bitcoin ETF application in Hong Kong. If approved, this would provide investors in China with legal access to invest in Bitcoin.

Despite these positive developments, investors should exercise caution due to short-term elevated volatility. If BTC survives above $42,557 by the end of the month, January will mark the fifth consecutive month of growth for the major cryptocurrency. However, historical trends suggest prices could drop in February before recovering during the pre-halving rally. So, it could be better to join the rally in March.